'We’re trying to separate the hype from the client need,' said Aditya Bhasin, BofA's CIO for consumer and wealth management technology.

Panelists speak at an artificial intelligence session at Bank of America Merrill Lynch's Fintech Summit on Thursday in New York. From left: David Boast, a member of Bank of America's Technology Partnership Development group; Ed Donner, co-founder and CEO of AI startup untapt; Sandeep Saini, head of global markets, sales, research and capital markets technology for Bank of America; Marc Weiss, principal and chief investment officer for Open Field Capital.
Photo:
Steven Rosenbush / WSJ

NEW YORK - Bank of America Corp. plans to debut this year an AI-powered digital assistant named Erica, which consumers can chat with through voice or text message through the bank’s mobile app. Speaking Thursday at a financial technology summit, executives said the chatbot represents the bank's measured approach to artificial intelligence, developing uses for the technology only in areas where the company thinks clients will truly benefit.

“We’re trying to separate the hype from the client need,” said Aditya Bhasin, Bank of America’s chief information officer for consumer and wealth management technology.

The topic of AI dominated much of the conversation at the fintech summit, hosted by Bank of America Merrill Lynch, the corporate and investment banking division of Bank of America, and enterprise technology venture capital fund Work-Bench.

Bank executives, investors and startup founders spoke on several panels at the all-day summit about the opportunities and pitfalls of AI, as well as other topics such as regulatory technology and the fintech ecosystem in New York.

A screenshot of Erica, Bank of America's chatbot
Photo:
Bank of America

Later this year, the bank will debut an AI-powered digital assistant named Erica, which consumers can chat with through voice or text message through the bank’s mobile app.

Mr. Bhasin said the chatbot can help consumers simplify and speed up transactions instead of wasting time navigating through the mobile app to find the right tabs. “Many apps today, including ours, are very menu-driven,” Mr. Bhasin said. “As more and more capabilities get delivered into these apps they become harder to navigate.”

With Erica, a client could say things like, “I want to send money to a friend,” or “I want to pay a bill,” and Erica can easily facilitate the transaction.

Erica could also harness the power of advanced analytics to give consumers suggestions about how they can better manage their personal finances. For example, if a consumer has a specified savings goal, Erica could alert them when there’s a balance left over in their checking account at the end of the month. The chatbot could ask whether they’d like to put the extra cash into a savings account or help the person set up an appointment with a financial solutions advisor.

Mr. Bhasin declined to say how long the bank has been developing Erica, but the chatbot was announced in October 2016. It’s currently going through testing, and when it debuts later this year, Erica will join a number of other chatbots in industries ranging from finance to airlines.

As artificial intelligence becomes more ubiquitous in business, some executives and investors at the fintech event spoke about the need to overcome so-called black box challenges of AI systems.

Underlying AI technologies such as neural networks, which are AI systems based on the human brain, do not have a built-in mechanism to explain how they came to a decision or recommendation. When an AI system, for example, confuses a dog with an elephant, it’s hard for humans to know why, said Marc Weiss, principal and chief investment officer at Open Field Capital LLC.

“As (AI goes into) health care and starts doing diagnoses of patients and you get false negatives and you don’t know why … there’s a big problem,” Mr. Weiss said at the event.

He said he’s investing in startups developing AI technologies modeled off the neocortex, a specific part of a mammalian brain that governs sensory perception, spatial reasoning and language. Those AI systems may not have the “black box problem,” he said.

Financial institutions such as Capital One Financial Corp. are working to solve these black box issues. Capital One is employing in-house experts to study “explainable AI,” a nascent field of research aimed at creating computer programs that can translate, in natural language, how a machine-learning model comes to a logical decision.

Mr. Bhasin said in a private interview after the event that the AI-powered Erica chatbot will not make decisions for consumers. “It’s a capability that will offer clients information to better understand how they can manage their financial lives and how we can help them,” he said.

However, he underscored the importance of transparency in AI. “We have to be able to know why a decision got made, and on what basis it got made,” he said.